Chandler and Business History in Japan

Article appearing in Business History Review, Vol. 82, No. 2

Business History Review

The work and ideas of Alfred D. Chandler Jr. have enriched the field of Japanese business history and our understanding of that nation’s industrial development. Chandler’s studies about the rise of the large, professionally managed, multidivisional firm in the United States highlight factors critical not only to the United States’ capitalist system but also to Japan’s. Indeed, large firms played a dominant role in Japan’s economic takeoff in the late 1800s. As these companies grew, they were transformed into professionally managed corporations. Managers, operating in a clear hierarchical chain of command, built up huge companies, such as Nihon Denki (NEC), Toshiba, Mitsubishi Electric, Hitachi, Nippon Steel, Matsushita, and Toyota. In Japanese as in U.S. firms, the invisible hand of management was critical to controlling the flow of work, from the input of raw materials to the production of finished goods.